Opening Calls:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady to 5 Lower |
| Butter Futures: | 1 to 2 Lower |
Outside Market Opening Calls:
| Corn Futures: | 2 to 3 Higher |
| Soybean Futures: | 6 to 12 Higher |
| Soybean Meal Futures: | $3 to $5 Higher |
| Wheat Futures: | 1 to 3 Higher |
Milk:
Milk production continues to increase as the calendar moves closer to spring flush. Milk production in January was 1.6% higher than a year earlier. This compares to a gain of 1.3% for January 2020 compared to January 2019. It is much in line with the continued growth we have seen in the industry. Weather has turned more seasonal with March just around the corner. Cow numbers continue to increase, which will keep production increasing as we move through spring. The hope is that demand will be able to keep up with increased production and that plants will be able to handle the milk. Spot milk price discounts were reduced last week as milk supply was disrupted due to the severe winter storm, but deeper discounts are expected to return now that milk production will regain much of what was lost.
Cheese:
The weakness of barrels and the inability of blocks to hold gains Tuesday, gives the impression that further weakness could unfold. However, the market has moved into what may be a sideways range for the time being. Lower prices should spur demand, which was seen on the Cold Storage report. American cheese showed a slight decline from December with total cheese only showing a minor increase. With strong cheese production, this certainly is positive.
Butter:
The growth in butter stocks in January of 54.6 million pounds is a large monthly increase, leaving plentiful supplies available to the general market. The old-crop/new-crop issue on the CME on March 1 many times has a short-term influence on the spot butter market. March 1 marks the date that butter produced prior to Dec. 1, 2020, is no longer able to be traded on the CME daily spot market. However, all butter is available to the general market, making this somewhat of a moot point. Cash weakness is expected again Wednesday.
